Economics and the Mirror of Nature

Editorial Note: This is an old and longform essay I wrote on the philosophy of economics and economic methodology originally for a history of economic thought class as a sophomore undergraduate at Hillsdale College back in April of 2015. I am uploading it here mostly for posterity as a historical interest in my own intellectual development and for any curious onlookers interested in what interpretive economic social theory could look like–at least at a high, sketchy and not detailed level.

It is worth noting that there is an obvious thing I should have done differently: it really should have treated the “ecological rationality” of figures like Vernon Smith and the later FA Hayek as a fourth alternative paradigm to the sort of rationality practiced by neoclassicals, the interpretive rationality practiced by some Austrians and the Bounded Rationality practiced by behavioral economists. This ecological notion of rationality which makes room for neoclassical-style constructivist theories of rationality–so long as they are understood as maps and not the terrain–is something I am more sympathetic towards these days alongside the intepretive, hermeneutic sort of rationality argued for in this essay.

I still think it gets a lot of the genealogical and psychological diagnosis of what historically has gone wrong in economic questions about rationality as developed by neoclassical, behavioral, and Misesean Austrian economics by relying too much on an unquestioned epistemic foundationalism , but I think normative pragmatists like Robert Brandom offer us a more constructively and ecologically critical way forward than I was aware of when I penned this paper.

The essay is presented here largely as it was originally written, with only minimal editing. Its sophomoric sketchiness, grand but unrealized ambitions, and rough edges are intact.

Economics and the Mirror of Nature: Richard Rorty’s Hermeneutics as an Approach to the Historical Study of Rationality in Relation to Economic Theory and Method

The conception of man as a “rational actor” is one of the key foundations of modern economic thinking. However, what exactly economists mean by “rationality” in the technical sense has historically been a fairly sticky issue that has evolved as economic theory has evolved. In some ways, rationality is tied up with epistemological problems in economic methodology. In other ways, it has been tied to value theory, expectations theory, and a host of other issues that seem like pure theoretical theory than meta-economic questions of method. However, a historical treatment of how economists have come to understand rationality deserves sensitivity to how economists have understood internal problems to economics itself and the relationship to the nature of the economic science.

FA Hayek (1952) lays out the potential for a progressive research program in the history of thought in the social sciences in his work Counterrevolution of Science. For Hayek, “scientism,” viewing the research program of the social sciences as essentially the same as the natural sciences, is prevalent the intellectual discourse about the social sciences. Hayek objects to “the objectivism of the scientistic approach” insofar as it treats the data of the social sciences as fundamentally the same as the data of the physical sciences, objective, measurable phenomena. For Hayek, this leads to “rationalist constructivism” in approach to solving the problems of society. Examples of “rationalist constructivism” include most primarily August Comte’s approach to social engineering and sociology and socialist attempts to design economies.

In a similar vein, Richard Rorty’s Philosophy and the Mirror of Nature (1980) objects to what he calls the “Platonic Kantian” approach to philosophy. For Rorty, the “image of the mind as a great mirror, containing various representations—some accurate, some not—and being capable of being studied by pure, nonempirical methods” (12) has lead philosophy astray into a series of non-constructive topics such as philosophy of mind and philosophy of language in which philosophers tried to “ground” all of knowledge in a way that every rational being could agree.

This paper proposes that FA Hayek’s program of “rational constructivism” should be viewed as a complementary approach to Richard Rorty’s program in the history of philosophy as laid out in the Mirror of Nature. Following the tradition of Lavoie (1990), this paper argues that a hermeneutical exegesis of economics as a whole, not simply one or the other tradition, might help bring the various “schools” of economics into better dialogue with each other. The first part lays out a partial history of one subject, utility theory, in which economics has attempted to objectify itself into the realm of natural science drawing heavily off of Zouboulakis’ Varieties of Economic Rationality (2013). The second part argues that Rorty’s hermeneutical approach can explain the historical narrative in a Hayekian way. A concluding section reflects on areas needed for further research.

Part 1: Our Utilitarian Essence
One of the fundamental assumptions, especially of the English school during the marginal revolution, in the formation of the economics science as we know it today was presupposing a fairly simple psychology of utilitarianism drawing from Bentham. However, this idea of utility theory as foundational to economics was eventually replaced by Pareto’s ordinal approach to utility theory. The title of this section draws from the title of the first section of Rorty’s Mirror of NatureL “Our Glassy Essence,” which reflects on how the image of “the mind as mirror” came into existence. This section lays out how utility came to be viewed as “essential” to the meaning of economics

Rationality as Utility Maximization: Jevons and the English Marginal Revolution
When economists say “rationality,” they have always intended it as a term of art. Thus phrases such as “rational action,” “rational actor,” and “rationality” in the technical economic sense have never really meant what is thought by these phrases in the everyday sense. In the everyday sense, what is typically meant by “rational” is that one is holding a belief based on reasonable evidence. However, for early economists rationality has always been tied up with some sense of individualized self-interest.

The most primitive version of rationality as an economic term of art was found in the work of classical political economist and utilitarian philosopher Jerome Bentham. For the early nineteenth century economists, to be rational was to maximize utility in the Benthamite sense; to maximize pleasure and minimize pain in a very broad sense. Thus early economic ideas of a rationally self-interested actor were intimately related to utility. An example of this idea of rationality as pursuit of utility is the work of William Jevons. Though Jevons never used the term “rationality,” it is clear in his work that the concept today called “rationality” is very central to Jevon’s work. Jevons adopted a very strong conception of rationality in line with homo economicus.

In order to understand how Jevons conceived of economics, it is important to understand its place in his broader context of economic thought on economic method. In his Theory of Political Economy (1871/2013),Jevons claimed that “Economics, if it is to be a science at all, must be a mathematical science” (434). This is largely because Jevons had a strong commitment to making economics analogous to physics. As he wrote in the first edition of TPE (1871/2013):

The theory of economy, thus treated, presents a close analogy to the science of Statistical Mechanics, and the Laws of Exchange are found to resemble the Laws of Equilibrium of a lever as determined by the principle of virtual velocities. (cited in Zouboulakis 2013,  26).

Unlike physics, however, Jevons claimed economics was “peculiar” because “its ultimate laws are known to us first by intuition, or at any rate they are furnished to us ready made by other mental or physical sciences” (cited in  Zouboulakis 2013, 30).

As Zouboulakis (2013) notes, a very strong conception of rationality Jevons insisted upon almost axiomatically was necessary to give economics this extreme level of mathematical and scientific rigor. In order to make rationality such a strong concept, Jevons would rely upon a Benthamite utilitarian theory with a heavily scientific flavor. He argued the idea that people maximize pleasure and avoid pain is an “obvious psychological law” on which “we can proceed to reason deductively with great confidence” (cited in Zouboulakis 2013, 30-31). For Jevons (1871/2013), “pleasure and pain bare undoubtedly the ultimate objects of the Calculus of Economics” (440). Utility, therefore, is the the central object of Jevon’s economic inquiry. Jevons, quoting Bentham, defines as “that property in any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness” (1871/2013, 438). Jevons maintains a concept of “total utility (440) that may be “estimated in magnitudes” (435). This idea of rationality is, to quote Herbert Simon (1978) “omniscient,” meaning is there is little to no concept of uncertainty, limited information, or psychological error taken into account in how people pursue rational self-interest, it is simply a law of psychology that people always seek to maximize utility, a law that is central for his understanding of economics as a science.

Jevons was not alone in his strong conception of understanding of rationality as a maximization principle. Zouboulakis (2013) argues that Cournot, Walras, and Marshall, all shared a similar conception of rationality to Jevons (35). In fact, Walras (Zouboulakis 2013) in line with Jevons adopted a strong conception of economics as another sort of mathematical physics. Edgeworth (1881/2013), though he doubted that Jevons was entirely correct on to what extent total utility was quantifiable still generally adopted the utilitarian outlook Jevons had assumed, as well as the mathematical outlook as he extensively compared it to physics (504-505).

To summarize, the concept of rationality as formulated by Jevons consists of the following four unique theoretical features:

  1. Defined as a maximization of total cardinal utility
  2. United with a psychological hypothesis
  3. Irrefutable, obviously true about human nature
  4. Assumes omniscience

It is dependent on another methodological feature: that economics is to be viewed mathematically and analogous to physics on some important level. It is important to note, however, that the early neoclassical economists were not wholly homogeneous in their outlook of economics as a science. Alfred Marshall argued that “economics cannot be compared with the exact physical sciences: for it deals with the ever changing and subtle forces of human nature” (qtd. in McKenzie 2009). Though Marshall’s conception of rationality was still largely in line with Jevons, his softer methodological positions would allow for a softening of rationality as a concept after the marginal revolution.

Rationality asInstrumentalism: Pareto’s Departure from Utility Theory
In addition to the concept of economics as a completely mathematical science, other assumptions that led to Jevon’s omniscient conception of rationality would be threatened. After the marginal revolution, primary cornerstones of how Jevons conceived of rationality, cardinal utility as a quantifiable concept, would be rejected by the economics profession. The key insight from Jevon’s subjective utility theory was his marginal analysis, his insight from the theory of exchange that consumers seek to equilibrate the ratios between the marginal utilities (what Jevons calls the “degree of utility”) of goods.

Though Jevon’s conception of total utility “constituted the metaphysical foundation of utilitarian economics, neither [its] measurement nor even their existence was central to their methods” (Read 2004). At the dawn of the twentieth century, Pareto had brought about the ordinal revolution. Any reference to “cardinal utility,” that is utility as a measurable concept, was completely removed. Instead, for Pareto, any measurable cardinal utility was replaced by ordinal utility—utility as a relative comparison of some basket of goods (cited in Read 2004).

With the change in utility followed a change, in the conception of rationality. Since one of the key theoretical implications of Jevon’s rationality thought was disproven, economists could greatly weaken what they meant by rationality. First, Pareto distanced rationality from being any sort of an axiomatic psychological claim. He did this by adopting a more positivist, experimental approach to economics, he declared “I am a believer in the efficiency of experimental methods. For me there exist no valuable demonstrations except those that are based on facts” (cited in Zouboulakis 2013, 37). However, given his rejection of cardinal utility, the hypothesis that rational actors can maximize utility becomes meaningless and untestable since it is unclear what they are maximizing (Zouboulkis 2013, 38). As Pareto said, “Let us suppose that we have a schedule of all possible choices indicating the order of preference. Once this schedule is available, homo œconimicus can leave the scene” (cited in Zouboulakis 2013, 38).

Instead, Pareto focuses only on the “facts” which he asserts are “the sales of certain goods and certain prices” (cited in Zouboulakis 2013, 38). In other words, Pareto is only concerned with the impact of rational choice theory in a market setting, not with the psychology behind those facts. For Pareto, then, “rationality is simply a choice of efficient means for serving any independently given objective,” Zouboulakis (2013) calls Pareto’s an “instrumental” conception of rationality (38).

For Pareto, contra Jevons, the extent to which rationality was wholly applicable to all of humanity was extremely limited. In his later works, he made a strong distinction between “logical” and “non-logical actions.” As Zaboulkis (2013, 39-41) puts it, logical actions are those in which the “subjective aim of the actor is reasonably connected with the action’s objective goal,” whereas everything else are things that man do not have control other such as psychological factors that an economist takes as given. This greatly limits the extent of human action that economics studies from Jevon’s attempts to universalize utilitarian psychological hypotheses.

To summarize, Pareto’s conception of rationality has the following theoretical features:

  1. Non-psychological
  2. Given within a means-ends framework (Instrumental)
  3. Non-universal, non-omniscient

Rationality as Purposeful Action: Mises’ Austrian Tautology

While Pareto had developed a fairly weak conception of rationality in contrast to Jevons, a separate tradition in the Austrian school of economists had developed a similar, though different, conception of rationality. This latter type of rationality is the conception primarily taken up by Ludwig von Mises and Carl Menger. In order to understand the Austrians, it is important to understand the historical context it was born out of in contrast to Pareto. Pareto was primarily influenced by Anglophonic and Francophonic marginalists, and had inherited from that tradition a strong conception of rationality wedded to cardinal utility that he had to soften with ordinal utility. In contrast, Mises had inherited the marginal utility theories of Menger (which included no reference to “total utility” as a cardinal concept to begin with), and had participated in the climate of the Methodenstreit which had placed heavy emphasis on theoretical methodology. Because of this, Mises’ idea of rationality bears resemblance to Pareto in important ways, however differs because of Mises’ and Pareto’s differing methods.

For Mises, to say that man is a rational actor is a tautological truth, he claims that “[h]uman action is necessarily rational” (1949/1998 18-19).[1] Though this sounds like a universalist claim found in Jevons, it is fundamentally different. For Mises to be a rational actor is not a psychological hypothesis, it simply means that man acts, or that he “the employment of means for the attainment of ends” (13). To be rational is simply to act purposefully, not to choose anything that an economist would normatively say one should chose such as maximization of cardinal utility.

It is important to note that unlike Jevons, the Austrian school adopted from the outset that rational actors are not omniscient. As Menger argued in his first statement of subjective value theory:

Even individuals whose economic activity is conducted rationally, and who therefore certainly endeavor to recognize the true importance of satisfactions in order to gain an accurate foundation for their economic activity, are subject to error. Error is inseparable from all human knowledge. (148)1

Likewise, Mises devoted a whole chapter of his magnum opus (1949/1998) to the concept of uncertainty (105-118).

It may be seen that there is a certain overlap between Mises’ idea of rationality and Pareto’s. Both have significantly weaker ideas of rationality than is implied by the utilitarians, and both distinguish economic rationality very carefully from psychology. For Mises, this means defining action as rational and defining its opposite “not irrational behavior, but a reactive response to stimuli” (1949/1998, 20). For Pareto, this means distinguishing between logical action and non-logical action and applying economic rationality only to the former.

However, there are important differences between Pareto and Mises: namely, Mises universalizes rationality as applied to all human action, Pareto does not. This is primarily due to differences in what is meant by “action,” Mises tautologically defines all action as rational, whereas Pareto simply makes action an instrument that is applied to a means-end framework. Thus, for Mises rationality defines the means-ends framework, for Pareto it is a tool that helps men pursue ends. The reason for this difference lies in their different views on economic methodology. Recall that Pareto is only concerned with facts that can be experimentally derived. However, Mises includes tautologies as an important part of his economic method which he calls “methodological a priorism” (1949/1998). Mises claims “tautologies” are helpful in providing “cognition” and “comprehension of living and changing reality” (38). Whereas Pareto would have scoffed at Mises idea of rationality as useless, for Mises it was a helpful a priori assumption for economic analysis, or in his terms “praxeological reasoning.”

To summarize, Mises’ weaker idea of rationality is marked by the following three qualities and assumes an a priorist methodological background:

  1. Rationality defines a means-end framework (is tautological)
  2. Is universal by a non-omniscient definition
  3. Non-psychological

The extent to which Mises’ idea of theory can be thought of as “foundational” to the rest of his social science is disputable. Clearly, Mises thought his theory was absolutely foundational, however that need not be the “foundation” of the rest of his economics. Zoboukalis seems to oversimplify in claiming that there’s a fundamental difference between Weber’s conception of an “ideal type” of rationality as universal and Mises’ conception of rationality as to some extent tautological. Boettke and Leeson (2006) claim that Mises rejected the analytic/synthetic distinction, thereby placing him in a more complex position than simple Kantian epistemology. However, Boettke, Lavoie, and Storr (2001) claim that Mises’ distinction between theory and history was “arbitrary” and use the philosophy of John Dewey to argue against it.

Rationality: How Lionel Robbins Misunderstood Mises, How Hayek Challenged Mises

The extent to which there is a universal “Austrian” conception of rationality is also disputable. Zaboukalis understands this in comparing the rationality of FA Hayek to Mises. Zaboukalis argues that Robbins presented Mises’ concept of rationality as “consistency” for a normative ideal in his work The Nature and Significance of Economic Science. This is supportable when Robbins (1932/2005 140) says:

There is nothing in its generalisations which necessarily implies reflective deliberation in ultimate valuation. It relies upon no assumption that individuals act rationally. But it does depend for its practical raison d’etre upon the assumption that it is desirable that they should do so. It does assume that, within the bounds of necessity, it is desirable to choose ends which can be achieved harmoniously.

Mises’ welfare economics clearly do not include all the presumptions that consistent action is “normative” that Robbins’ neoclassical misinterpretation of Mises presupposes. Mises explicitly says in Human Action that man’s preferences are situated in time and therefore are inconsistent over time. Mises places emphasis on man’s preferences as situated in time and uncertainty, Robbins makes the preferences sound as if they are independent of time and uncertainty in every sense.

Rizzo (2013) puts emphasis on how Mises postulated the meaning of economics to be primary. This passage is worth quoting at length:

First, we must distinguish between the meaning of behavior and criteria for the rationality of behavior. Abstract criteria of rationality cannot be applied without first understanding what individuals mean by what they do. Getting the meaning wrong may result in inaccurately labeling the behavior as irrational.

In Zoboukalis’ presentation, this lead Samuelson (1938) to present his revealed theory of preferences, which included the assumption of invariance, in Economica. Samuelson seems to have misunderstood Robbin’s misunderstanding of Mises on an even deeper level. In 1937 which Zoboukalis presents as “the year of uncertainty,” there were several challenges to Mises, one of which included Hayek’s challenge to Mises in Economics and Knowledge (cited in Zoboukalis, 1938). Kirzner (2001 81-89) argues that Hayek misunderstood what Mises thought about rationality. Mises did not take invariance through time to be normative, he took it to be positive at a particular instance.

Economics without Constancy in Utility: Preference Theory, Behavioral Economics as Paradigms aiming to be “Successor Subjects”

In response to the challenges to invariance raised by Hayek, Friedman and Samuelson, Zoubakalis argues, made a defense of the normative criterion of rationality, which became standard in the “neoclassical synthesis.” This was primarily the “as-if” methodology of Friedman which Austrians find so objectionable. In the research program of this paper, Lavoie’s (1980) hermeneutical way of dealing with the problem of pure methodological instrumentalism will be an issue. Lavoie argues for a way of doing economics without epistemic foundationalism, drawing directly off Rorty. The extent to which there is a balance established between what Lavoie sees as the crude epistemic foundationalism of Freidman’s positivist approach and the possibly foundationalist a priori approach of Mises will be perhaps the main focus of further research in this program. However, unlike Lavoie, the Hermeneutics will be more likely drawn directly from Rorty than Gadamer.

After Freidman, the invention of behavioral economics in Kahneman and Tverskey challenged several of the positive assumptions of neoclassical theory. Kahneman (2012) describes the Chicago school’s views on the matter in relation to the behavioral economic one as follows:

The only test of rationality is not whether a person’s beliefs and preferences are reasonable, but whether they are internally consistent. A rational person can believe in ghosts so long as all her other beliefs are consistent with the existence of ghosts. A rational person can prefer being hated or being loved, so long as his preferences are consistent. Rationality is logical coherence, reasonable or not. Econs are rational by this definition but there is overwhelming evidence that humans cannot be.

In modern neo-classical economics, which has incorporated Kahneman’s theories of loss aversion and hyperbolic discounting as mathematically as possible, this is an oversimplification. However, there is reason to believe that the rigid formalism of modern Chicago economics may or may not be consistent with the best means of developing a research program, however useful it might be in many contexts.

Recent scholarship on the relationship between behavioral economics and neoclassical theory has tried to figure out how to get past utility without invariance through time. This issue suggests there is no such thing as “true preferences” as Pareto, Samuelson, and Friedman implicitly assumed. Stigler (1977), in violation of typical Chicago school method posited a way of assuming there were “true preferences” by making appeal to the possibility that our preferences are developed into some preferences everyone could agree on in time. For example, one who tastes wine initially might not know what they are doing; however, with time, they become a wine connoisseur, and in general wine connoisseur agree on their preferences. Drawing of Stigler, Robb (2009) draws of Nietzsche’s psychology to further support Stigler’s theories. Heckman (2009), in a comment on Robb’s paper responded in typical neoclassical fashion, claiming the psychological theories of Neitzsche can be made endogenous in the neoclassical model with some mathematical tweaks. Robb made some amazingly insightful comments in response:

However, I am not prepared to take the easy way out and fully accept (R1) as Nietzschean Economics. Sticking with Occam’s razor, I would propose, as an alternative to (R1), that our engagement with time is twofold and a portion of it lies outside of pleasure maximization. While lacking the precision of fully specified models, the WTP approach gives specific predictions that are useful in practical problems in economics. Nietzsche, along with Heraclites, Kierkegaard, Hegel and Bergson, was the philosopher of becoming – whether I have expressed the point with any useful clarity at all, he should have a great deal to teach us.

I should acknowledge that Nietzschean Economics has a personal objective beyond explaining various phenomena in economic life. I wanted to arrive at a “framework for modeling intertemporal choice that is more closely aligned with our immediate experience.” A formative event for me was a yearlong spell of unemployment in 2001 after leaving a job managing the global derivatives and securities business of Japan’s largest bank. I was looking forward to inputting some ti, ei, Xi and realizing U(Z). But when my unexamined faith in U(Z) was put to the test, it did not turn out like I expected. Without obstacles to overcome, I discovered that the day is long. I got back to work. I believe my experience is not uncommon.

Rizzo (2012), meanwhile, draws on three ways Austrians in general have tried to reconcile the balance between psychology and economics. Rizzo draws off of Wittgenstein’s philosophy of language, Schutz’s phenomenological sociology, and Hayek’s gestalt psychology in The Sensory Order.

What is striking about Robb’s “Nietzschean economics” and Rizzo’s work on Austrian economics is they are two economists from two very different schools doing the same exact thing Rorty attempted to do with epistemology in the 70s. Much as there was an aversion to psychology in economics throughout the early formulations of utility theory, in philosophy there was an eversion to implementing psychology into epistemology because epistemology conceived of itself as the epistemic foundation on which all of philosophical knowledge stood. Likewise, economists have been reluctant to let any psychology into their utility theories at all. Rorty proposed a form of “behavioral epistemology” modeled after the work of William James, however Rorty proposed that “behavioral epistemology” should not be thought of as foundational to the philosophical project as a whole. “Behavioral economics” has, from a neo-pragmatist perspective, committed the sin Rorty avoided in trying to be the new foundation of preference theory and choice theory.

Just as Rorty was skeptical extensively in Philosophy and the Mirror of Nature” about “successor subjects” such as philosophy of mind and language attempting to be substitutes for Kantian epistemology as the foundation of all of philosophical, economists should be skeptical of possible “successor subjects” to Jevons-style utility theory in economics. Pareto once famously described his war against the English School as a war against “(t)hose who have a hankering for metaphysics” (McLure 199 312). Preference theory, behavioral experiments, and even Neitzschean psychology in Robb’s formulation could be viewed as merely “successor subjects” to Jevon’s ordinal utility theory. Just as Rorty claimed philosophers clung to “our glassy essence” in Kantian epistemology by postulating a whole bunch of “successor subjects” to epistemology, economists may need to be careful in clinging to “our utilitarian essence” in trying to relegate the “foundation” of the social sciences to other realms.

Part II: Utility Theory to Hermeneutics

It is striking that many of the philosophers that the economists who are trying to figure out where to go in the neoclassical and Austrian traditions are appealing to the same philosophers Rorty did. Lavoie (1990) appealed to Heiddeger and Gadamer under Rorty’s influence to rid economics of its foundationalism in the way I described. Boettke is appealing to Quine and Dewey, two pragmatists to understand Mises’ apriori assumption of rationality over human action. Rizzo is appealing to Wittgenstein, one of Rorty’s “heroes” of Philosophy and the Mirror of Nature for his philosophy of language. Robb is appealing to Neitzsche, another one of Rorty’s major influences. Rorty is in some sense what got Lavoie going in the Hermaneutic research program to begin with. Perhaps, a return more specifically to the manner in which Rorty presented hermeneutics is what is necessary for economists to approach the question of rationality at this point, this section aims to more narrowly analyze Rorty’s hermeneutics, a concluding section suggests general lessons from the history of rationality out of a Rortian Hermeneutic research program in the subject of economic rationality.

Kuhn, Rorty, and Incommensurability

In chapter seven of Philosophy and the Mirror of Nature, Rorty appeals most fully to Thomas Kuhn’s philosophy of science. Kuhn’s philosophy of science includes the idea of “paradigms” in research, that is basic fundamental assumptions that go into a scientist’s work. Khun then carefully distinguishes between “commensurable paradigms,” those fundamental assumptions that can work together, and “incommensurable paradigms,” those fundamental assumptions that cannot. If there are two incommensurable paradigms at once, there will be a “paradigm shift.” The most famous and widely cited example is the shift from Newtonian physics to Quantum Mechanics in physics.

Rorty posits the new place of philosophy should be to “edify,” to be therapeutic in some sense on the personal level of the philosopher. To some extent, that idea of an “edifying philosophy” seems to be going on in the back of Robb’s mind in his response to Heckman on Nietzsche. But not only is philosophy to edify, it is also possible to use philosophy as hermeneutics to commensurate seemingly incommensurable paradigms. It may be the case that this is the direction economics in which must go.

In Vernon Smith’s Nobel Prize lecture (2002), he laid out a way in which paradigms could be thought to relate to each other in this question of rationality in economics. Smith distinguishes between “constructivist rationality,” drawing off Hayek’s program mentioned at the outset of this paper in The Counterrevolution of Science, and “ecological rationality.” “Constructivist rationality,” to Smith, is rationality stems from Cartesian rationalism (506) and “provisionally assumes or ‘requires’ agents to possess complete payoff and other information—far more than could ever be given to one mind.” Ecological rationality, on the other hand, is rationality that is identified with Hayek and the Scottish enlightenment. It is a “concept of rational order, as an undersigned ecological system that emerges out of cultural and biological evolutionary process” (508).


Vernon Smith thought that the research paradigms between the two are somehow commensurable. Though this is likely the case, most economists researching the literature in the behavioral and neoclassical traditions seem to disagree. Most of the economists in the hermeneutic tradition researching the issue seem to have Lakatos’ philosophy of science more prominent in their minds than Kuhn’s (Cachanosky 2013). Perhaps, for the moment, economics is in a place that is closer to Kuhn’s philosophy of science than Lakatos, and we need to assume that the paradigms between “ecological rationality” and “constructivist rationality” are incommensurable in some sense, though agree with Vernon Smith that they need not be. Further research in the Rortian hermeneutic tradition may help commensurate those paradigms.

Conclusion: Open-Mindedness in Rational Economic Discourse

Often, debate over rationality gets extremely heated thanks to its connection at times to politics and the nature of capitalism. For an example, in Nudge Thaler and Sunstein primarily place blame for the financial crisis on behavioral factors (2009 255-260). New Keynsians might respond to this by yelling at the top of their lungs that they’re ignoring aggregate demand, Austrians might respond by yelling at the top of their lungs that they’re ignoring the interest rate and business cycle theory. But perhaps a combination of the three, a pluralism, is necessary for the explanation. The problem with economic debates is too often when it gets associated with the political spheres, the arguments get personally provocative and nasty. This is how incommensurable paradigms occur, and that is likely what has occurred with the debate about rationality. Thaler and Sunstein are probably oversimplifying the complex myriad of institutional factors that went into causing the recession, but yelling that your business cycle theory explains it is not the right solution.

Zouboulakis ends Verities of Economic Rationality by proclaiming “What is Rational after all?” Rorty would say something like, ‘Rationality is not a human faculty, it’s a social virtue.’ In order to maintain open-minded discussion and approach a point when there can be normal discourse in the economics profession, perhaps this is the answer that is needed. Perhaps all the actors in a market economy are the “rational” ones in Rorty’s use of the term, and economists are not.

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—. 2011. Thinking Fast and Slow. New York, NY: Farrar, Straus and Giroux.

McKenzie, Robert B. 2009. “Rationality in Economic thought: From Thomas Robert Malthus to Alfred Marshall and Philip Wicksteed.” In Predictably Rational, edited by Robert McKenzie. Berlin Heidelberg: Springer. http://link.springer.com/chapter/10.1007%2F978-3-642-01586-1_4?LI=true.

Menger, Carl. 1976. Principles of Economics. Auburn, AL: Ludwig von Mises Institute. http://mises.org/sites/default/files/Principles%20of%20Economics_5.pdf. (Originally Published in 1871.)

Mises, Ludwig. 1998. Human Action. Auburn, AL: Ludwig von Mises Institute. (Originally published in 1949).

—. 2013. Epistemological Problems in Economics. Indianapolis: Liberty Fund, Inc. http://oll.libertyfund.org/titles/2427. (Originally published in 1933).

Read, Daniel. 2004. “Utility theory from Jeremy Bentham to Daniel Kahneman.” LSE Department of Operational Research Working Paper LSEOR 04-64.

Rizzo, Mario. 2012. “The Problem of Rationality: Behavioral Economics Meets Austrian Economics.” Unpublished. http://econ.as.nyu.edu/docs/IO/28036/BEHAVIORAL_ECONOMICS.pdf.

Robb, Richard. 2009. “Nietzsche and the Economics of Becoming.” Capitalism and Society. 4(3) (January). < http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2209313>

Robbins, Lionel. An Essay on the Nature and Significance of Economic Science.

Rorty, Richard. 1979. Philosophy and the Mirror of Nature. Princeton, NJ: Princeton University Press.

Samuelson, Peter. 1938. “A Note on the Pure Theory of Consumer’s Behaviour.” Economica, New Series, 5(17) (February): 61-71.

Thaler, Richard and Cass Sunstein. 2009. Nudge. Penguin Books.

Simon, Herbert A. 1972. “Theories of Bounded Rationality.” In Decision and Organization edited by C.B. McGuire and Roy Radner. Amsterdam: North Holland Publishing. http://mx.nthu.edu.tw/~cshwang/teaching-economics/econ5005/Papers/Simon-H=Theoriesof%20Bounded%20Rationality.pdf.

—. 1978. “Rational Decision-Making in Business Organizations.” Paper Presented at Nobel Prize Memorial Lecture Pittsburg, PA.

Zouboulakis, Michel. 2013. The Varieties of Economic Rationality. New York, NY: Routledge.


[1] Though Mises’ 1949 work Human Action is cited here, it is important to note that he had laid out very similar positions much earlier (1933/2013).

In the Ruins of Public Reason, Part III: When the Barbarians Are at the Gates; Fascism, Bullshit, and the Paradox of Tolerance

Note: This is the third in a series of essays on public discourse. Here’s Part 1 and Part 2

Three years ago, I started this essay series on the collapse of public discourse. At the time, I was frustrated by how left-wing and progressive spaces had become cognitively rigid, hostile, and uncharitable to any and all challenges to their orthodoxy. I still stand by most everything I said in those essays. Once you have successfully identified that your interlocutors are genuinely engaging in good faith, you must drop the soldier mindset that you are combating a barbarian who is going to destroy society and adopt a scout mindset. For discourse to serve any useful epistemic or political function, interlocutors must accept and practice something like Habermas’ rules of discourse or Grice’s maxims of discourse, where everyone is allowed to question or introduce any idea to cooperatively arrive at an intersubjective truth. The project of that previous essay was to therapeutically remind myself and any readers to actually apply and practice those rules of discourse in good-faith communication.

However, at the time, I should have more richly emphasized something that has been quite obviously true for some time now: most interlocutors in the political realm have little to no interest in discourse. I wish more people had such an interest, and still stand by the project of trying to get more people, particularly in leftist and libertarian spaces, to realize that when they speak to each other, they are not dealing with barbarian threats. However, recent events have made it clear that the real problem is figuring out when an interlocutor is worthy of having the rules of discourse applied in exchanges with them. Here is an obviously non-exhaustive list of such events in recent times that make this clear: 

  1. The extent to which Trump himself, as well as his advisors and lawyers, engage in lazy, dishonest, and bad-faith rationalizations for naked, sadistic, unconstitutional executive power grabs.
  2. The takeover of the most politically influential social media by a fascist billionaire rent-seeker has resulted in a complete fragmentation and breakdown of the online public square
  3. The degree to which most on the right and many on the left indulge in insane conspiracy theories, which have eroded and destroyed the epistemic norms of society, for reasons of rational irrationality.
  4. Even the Supreme Court, the institution that ostensibly is most committed to publicly justifying and engaging in good-faith reasoning about laws, is now giving blatantly awful, authoritarian opinions so out of step with their ostensibly originalist and/or textualist legal hermeneutics and constitutionalist principles (not to mention the opinions of even conservative judges in lower courts). It certainly seems the justices are just as nakedly corrupt and intellectually bankrupt as rabble-rousing aspiring autocrats. Indeed, the court is in such a decrepit state of personalist capture by an aspiring fascist dictator that they aren’t even attempting to publicly justify ‘shadow docket’ rulings in his favor. One can only conclude conservative justices are engaging in bad-faith power-grabs for themselves, whether they intend to or not. Although this has always been true of statist monocentric courts to some extent, recent events have only further eroded the court’s pretenses to being a politically 

All these were obvious trends three years ago and have very predictably only gotten more severe.  You may quibble with the extent of my assessment of any individual example above. Regardless, all but the most committed of Trumpanzees can agree that there is a time and place to become a bit dialogically illiberal in times like these. Thus, it is time to address how one can be a dialogical liberal when the barbarians truly are at the gates. The tough question to address now is this: what should the dialogical liberal do when faced with a real barbarian, and how does she know she is dealing with a barbarian? 

This is an essay about how to remain a dialogical liberal when dialogical liberalism is being weaponized against you. This essay isn’t for the zealots or the trolls. It’s for those of us who believed, maybe still believe, that democracy depends on dialogue—but who are also haunted by the sense that this faith is being used against us.

Epistemically Exploitative Bullshit

I always intended to write an essay to correct the shortcomings of the original one. I regret that, for various personal reasons, I did not do so sooner. The sad truth is that a great many dialogical illiberals who are also substantively illiberal engage in esoteric communication (consciously or not). That is, their exoteric pretenses to civil, good-faith communication elide an esoteric will to domination. Sartre observed this phenomenon in the context of antisemitism, and he is worth quoting at length:

Never believe that anti‐Semites are completely unaware of the absurdity of their replies. They know that their remarks are frivolous, open to challenge. But they are amusing themselves, for it is their adversary who is obliged to use words responsibly, since he believes in words. The anti‐Semites have the right to play. They even like to play with discourse for, by giving ridiculous reasons, they discredit the seriousness of their interlocutors. They delight in acting in bad faith, since they seek not to persuade by sound argument but to intimidate and disconcert. If you press them too closely, they will abruptly fall silent, loftily indicating by some phrase that the time for argument is past. It is not that they are afraid of being convinced. They fear only to appear ridiculous or to prejudice by their embarrassment their hope of winning over some third person to their side.

If then, as we have been able to observe, the anti‐Semite is impervious to reason and to experience, it is not because his conviction is strong. Rather, his conviction is strong because he has chosen first of all to be impervious.

What Sartre says of antisemitism is true of illiberal authoritarians quite generally. Thomas Szanto has helpfully called this phenomenon “epistemically exploitative bullshit.” 

One feature of epistemically exploitative bullshit that Szanto highlights is that epistemically exploitative bullshit need not be intentional. Indeed, as Sartre implies in the quote above, the ‘bad faith’ of the epistemically exploitative bullshitter involves a sort of self-deception that he may not even be consciously aware of. Indeed, most authoritarians (especially in the Trump era) are not sufficiently self-aware or intelligent enough to consciously realize that they are deceiving others about their attitude towards truth by spouting bullshit. As Henry Frankfurt observed, bullshit is different from lying in that the liar is intentionally misrepresenting the truth, but the bullshitter has no real concern for truth in the first place. Thus, many bullshiters (especially those engaged in epistemically exploitative bullshit) believe their own bullshit, often to their detriment.

However, the fact that epistemically exploitative bullshit is often unintentional, or at least not consciously intentional, creates a serious ineliminable epistemic problem for the dialogical liberal who seeks to combat it. It is quite difficult to publicly and demonstrably falsify the hypothesis that one’s interlocutor is engaging in epistemically exploitative bullshit. This often causes people who, in their heart of hearts, aspire to be epistemically virtuous dialogical liberals to misidentify their interlocutors as engaging in epistemically exploitative bullshit and contemptuously dismiss them. I, for one, have been guilty of this quite a bit in recent years, and I imagine any self-reflective reader will realize they have made this mistake as well. We will return to this epistemic difficulty in the next essay in this series.

To avoid this mistake, we must continually remind ourselves that the ascription of intention is sometimes a red herring. Epistemically exploitative bullshit is not just a problem because bullshitters intentionally weaponize it to destroy liberal democracies. It is a problem because of the social and (un)dialectical function that it plays in discourse rather than its psychological status as intentional or unintentional. 

It is also worth remembering at this point that it is not just fire-breathing fascists who engage in epistemically exploitative bullshit. Many non-self-aware, not consciously political, perhaps even liberal, political actors spout epistemically exploitative bullshit as well. Consider the phenomenon of property owners—both wealthy landlords and middle-class suburbanites—who appeal to “neighborhood character” and environmental concerns to weaponize government policy for the end of protecting the economic rents they receive in the form of property values. Consider the similar phenomenon of many market incumbents, from tech CEOs in AI to healthcare executives and professionals, to sports team owners, to industrial unions, to large media companies, who all weaponize various seemingly plausible (and sometimes substantively true) economic arguments to capture the state’s regulatory apparatus. Consider how sugar, tobacco, and petrochemical companies all weaponized junk science on, respectively, obesity, cigarettes, and climate change to undermine efforts to curtail their economic activity. Almost none of these people are fire-breathing fascists, and many may believe their ideological bullshit is true and tell themselves they are helping the world by advancing their arguments. 

The pervasive economic phenomenon of “bootleggers and Baptists” should remind us that an unintentional form of epistemically exploitative bullshit plays a crucial role in rent seeking all across the political spectrum. This form of bullshit is particularly hard to combat precisely because it is unintentional, but its lack of intentionality in no way lessens the harmful social and (un)dialectical functions it severe.

Despite those considerations, it is still worth distinguishing between consciously intentional forms of aggressive esotericism and more unintentional versions because they must be approached very differently. Unintentional bullshitters do not see themselves as dialogically illiberal. Therefore, responding to them with aggressive rhetorical flourishes that treat them contemptuously is very unlikely to be helpful. For this reason, the general (though defeasible) presumption that any given person spouting epistemically exploitative bullshit is not an enemy that I was trying to cultivate in the second part of this essay series still stands. In the next essay, I will address how we know when this presumption has been defeated. However, for now, let us turn our attention to the forms of epistemically exploitative bullshit common today on the right. We have now seen how epistemically exploitative bullshit can appear even in technocratic, liberal settings. But that phenomenon takes on a more virulent form when fused with authoritarian intent. This is what I call aggressive esotericism.

Aggressive Esotericism

The corrosiveness of these more ‘liberal’ and technocratic forms of epistemically exploitative bullshit discussed above, while serious, pales in comparison to more bombastically authoritarian forms of it. The truly authoritarian epistemically exploitative bullshiter aims at more than amassing wealth by capturing some limited area of state policy. While he also does that, the fascist aims at the more ambitious goal of dismantling democracy and seizing the entire apparatus of the state itself.

 Let us name this more dangerous form of epistemically exploitative bullshit. Let us call this aggressive esotericism and loosely define it as the phenomenon of authoritarians weaponizing the superficial trappings of democratic conversation to elide their will to dominate others. This makes the fascistic, aggressive esotericist all the more cruel, destructive, and corrosive of society’s epistemic and political institutions.

It is worth briefly commenting on my choice of the words “aggressive esotericism” for this. The word “esoteric” in the way I am using it has its roots in Straussian scholars who argue that many philosophers in the Western tradition historically did not literally mean what their discursive prose appears to say. Esoteric here does not mean “strange,” but something closer to “hidden,” in contrast to the exoteric, surface-level meaning of the text. We need not concern ourselves with the fascinating and controversial question of whether Straussians are right to esoterically read the history of Western philosophy as they do. Instead, I am applying the general idea of a distinction between the surface level and deeper meaning of a text, the sociological problem of interpreting both the words and the deeds of certain very authoritarian political actors. 

I choose the word “aggressive” to contrast with what Arthur Melzer calls “protective,” “pedagogical,” or “defensive” esotericism. In Philosophy Between the Lines Melzer argues that historically, philosophers often hid a deeper layer of meaning in their great texts. In the ancient world, Melzer argues, this was in part because they feared theoretical philosophical ideas could disintegrate social order (hence the “protective esotericism”), wanted their young students to learn how to come to philosophical truths themselves (hence the “pedagogical esotericism”), or else wanted to protect themselves from authorities for ‘corrupting the youth’  (as Socrates was accused) with their heterodox ideas. 

As the modern world emerged during the Enlightenment, Melzer argues esotericism continued as philosophers such as John Locke wrote hidden messages not just for defensive reasons but to help foster liberating moral progress in society, as they had a far less pessimistic view about the role of theoretical philosophy in public life (hence their “political esotericism”). Whether Melzer is correct in his reading of the history of Western political thought need not concern us now. My claim is that many authoritarians (both right-wing Fascists and left-wing authoritarian Communists) invert this liberal Enlightenment political esotericism by engaging—both in words and in deeds, both consciously and subconsciously, and both intentionally and unintentionally—in aggressive esotericism. Hiding their esoteric will to domination behind a superficial façade of ‘rational’ argumentation.

Aggressive esotericism is a subset of the epistemically exploitative bullshit. While aggressive esotericism may be more often intentional than more technocratic forms of epistemically exploitative bullshit, it is not always so. You might realize this when you reflect on heated debates you may have had during Thanksgiving dinners with your committed Trumpist family members. Nonetheless, this lack of intention doesn’t cover up the fact that their wanton wallowing in motivated reasoning, rational ignorance, and rational irrationality has the selfish effect of empowering members of their ingroup over members of their outgroup. This directly parallels how the lack of self-awareness of the technocratic rentseeker ameliorates the dispersed economic costs on society.

Aggressive Esotericism and the Paradox of Tolerance

Even if one suspects one is encountering a true fascist, one should still have the defeasible presumption that they are a good-faith interlocutor. Nonetheless, fascists perniciously abuse this meta-discursive norm. This effect has been well-known since Popper labelled it the paradox of tolerance.  

The paradox of tolerance has long been abused by dialogical illiberals on both the left and the right to undermine the ideas of free speech and toleration in an open society, legal and social norms like academic freedom and free speech, and to generally weaken the presumption of good faith we have been discussing. This, however, was far from Popper’s intention. It is worth revisiting Popper’s discussion of the Paradox of Tolerance in The Open Society and Its Enemies:

Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them. In this formulation, I do not imply, for instance, that we should always suppress the utterance of intolerant philosophies; as long as we can counter them by rational argument and keep them in check by public opinion, suppression would certainly be most unwise. But we should claim the right even to suppress them, for it may easily turn out that they are not prepared to meet us on the level of rational argument, but begin by denouncing all argument; they may forbid their followers to listen to anything as deceptive as rational argument, and teach them to answer arguments by the use of their fists. We should therefore claim, in the name of tolerance, the right not to tolerate the intolerant. We should claim that any movement preaching intolerance places itself outside the law, and we should consider incitement to intolerance and persecution as criminal, exactly as we should consider incitement to murder, or to kidnapping, or as we should consider incitement to the revival of the slave trade.

His point here is not so much to sanction State censorship of fascist ideas. Instead, his point is that there are limits to what should be tolerated. To translate this to our language earlier in the essay, he is just making the banal point that our presumption of good-faith discourse is, in fact, defeasible. The “right to tolerate the intolerant” need not manifest as legal restrictions on speech or the abandonment of norms like academic freedom. This is often a bad idea, given that state and administrative censorship creates a sort of Streisand effect that fascists can exploit by whining, “Help, help, I’m being repressed.” If you gun down the fascist messenger, you guarantee that he will be made into a saint. Further, censorship will just create a backlash as those who are not yet fully-committed Machiavellian fascists become tribally polarized against the ideas of liberal democracy. Even if Popper himself might not have been as resistant to state power as I am, there are good reasons not to use state power.

Instead, our “right to tolerate the intolerant” could be realized by fostering a strong, stigmergically evolved social stigma against fascist views. Rather than censorship, this stigma should be exercised by legally tolerating the fascists who spout their aggressively esoteric bullshit even while we strongly rebuke them. Cultivating this stigma includes not just strongly rebuking the epistemically exploitative bullshit ‘arguments’ fascists make, but exercising one’s own right to free speech and free association, reporting/exposing/boycotting those, and sentimental education with those the fascists are trying to target. Sometimes, it must include defensive violence against fascists when their epistemically exploitative bullshit manifests not just in words, but acts of aggression against their enemies. 

The paradox of tolerance, as Popper saw, is not a rejection of good-faith dialogue but a recognition of its vulnerability. The fascists’ most devastating move is not to shout down discourse but to simulate it: to adopt its procedural trappings while emptying it of sincerity. What I call aggressive esotericism names this phenomenon. It is the strategic abuse of our meta-discursive presumption of good faith.

Therefore, one must be very careful to guard against mission creep in pursuing this stigmergic process of cultivating stigma in defense of toleration. As Nietzsche warned, we must be guarded against the danger that we become the monsters against whom we are fighting. I hope to discuss later in this essay series how many on the left have become such monsters. For now, let us just observe that this sort of non-state-based intolerant defense of toleration does not conceptually conflict with the defeasible presumption of good faith.

In the next part of this series, I turn to the harder question: when and how can a dialogical liberal justifiably conclude that an interlocutor is no longer operating in good faith?

Some arbitrage free Byzantine rates of return

Byzantium. The surprising life of a medieval empire – by Judith Herrin

In the economy chapter, apart from the often overlooked hard-ass (gold) and long-ass (700 years) of monetary stability, the author discusses some social aspects of economic life. The Byzantine elites, following on Ancient Rome’s disdain for commercial endeavors, typically opted to invest in three things: Land, administrative offices (which could confer some coin in unofficial ways), and titles in the Court.

A Byzantine celebration, as copilot imagined it. In the other versions, people were so hardcore eastern orthodox christians that even had halos.

The Court titles had fancy names and came with regular allowances. The more mundane ones had a rate of return of 2.5%- 3.0%, while the higher-ups (like Protospatharios, loosely meaning First Sword Bearer, with responsibilities that oscillated among Chief Bodyguard, Receptionist and Master of Ceremonies) reached 8.3%. Since Byzantines had also inherited Rome’s practise of capping interest rates, we know that a simple citizen could lend at a rate of 6.0% (a banker at 8.0% and a distinguised person like a Senator at 4.0%).

Re: Byzantine interest rates, from the impressive but rather dry, A History of Interest Rates – by Sidney Homer & Richard Sylla

So, it mostly did not make sense to buy a Court title, money-wise. Unless you did manage to land as the Protospatharios, so you could enter a risk-free carry trade of 2.3% and also enjoy lovely red robes with gold lining or white robes and a golden mantle (the latter attire was reserved for eunuchs). Half-joking aside, the titles were not transferable (that is, no secondary market), so you could not probably even get back the initial investment. It turns out, fancy names / clothes/ duties/ company were a major factor, after all. And secondary markets serve a purpose, at least sometimes.

Lit in Review: Things that move people

Three papers from this year’s American Economic Journal: Economic Policy deal with shocks that change people’s willingness to migrate to another location. As usual with these, I’m reporting on recent research results that readers might find interesting, but I’m not otherwise commenting.

Nian and Wang, “Go with the Politician

In a study of crony capitalism in China: when a Chinese local leader is transferred from one prefecture to another, large firms in the old prefecture buy up 3x more land than average in the new prefecture at half the normal price. These land parcels show lower use efficiency afterwards. For the last 30 years, land sales make up 60% of local government revenue. There is no effect going the opposite direction (firms in the new prefecture buying land in the old one) and there is no effect when that politician subsequently moves to the next prefecture.

Moretti and Wilson, “Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy

Following the Forbes 400 richest Americans from 1981-2017, it is clear that they are very likely to move away from states with estate taxes, particularly as they get older. They “find a sharp and economically large increase in estate tax revenues in the three years after a Forbes billionaire’s death.” Putting the two effects together, they find that it is still profitable for most states to adopt estate taxes despite some departures with a cost/benefit ratio of 0.69.

Liu, Shamdasani, and Taraz, “Climate Change and Labor Reallocation: Evidence from Six Decades of the Indian Census

A panel fixed-effect model looking at how the climate changed decade by decade shows that fewer Indian workers move from rural to urban or ag to non-ag firms within a district, but no effect on movement between districts. They also show this comes from changes in demand patterns: higher temperatures lower rural yields and incomes, so they buy less from non-ag sectors, which reduces the demand for non-ag labor. These effects are larger in districts with fewer roads and/or less access to the formal banking sector.

An infinite (or maybe indefinite) loop of good and bad sense in public policy

A case of couleur locale

Peloponnese in Southern Greece features one of the most spectacular rack trains in the world, “Odontotos”. The short route connects a seashore town (Diakofto) with the mountainous Kalavryta plateau (700m altitude), up and through the impressive Vouraikos Gorge. Visited it for the first time recently. I kind of knew that railways were built in 1880s/90s? Something like that. The relatively young Greece acquired the large Thessalia flatland in the north at the time, putting integration via transport into perspective. Government was frantically trying to develop inter/ intra-national trade routes and at the same time bring forth a late to the party industrial mojo. Railway became a smoking symbol of this endeavor.

The initial expansion from Athens to the Peloponnese makes sense: Apart from the obvious pros (accessibility, speed, safety, mass character, for natives and visitors alike) of the railway, there were some major ports and established trade houses there, while agricultural production was also of note. The rails formed a curve around the northern/ western coastal line of Peloponnese and cut through its mainland in the southern/ eastern sides, in order to form a ring of sorts:

It’s all Greek to you (source)

This is the 1882 plan, which mostly went through. The network was constructed in a “regular” manner, albeit with rails less wide than the international standard ‘cause cost, including cities, towns, ports and a couple of special sites (i.e., Olympia). And then we have the green-circled outcrop, the rack rail. The recent trip there left me perplexed. Why decide to undertake such a difficult task in rugged terrain, that needed expertise and special rails (different from those of the rest)?

Surely, Kalavryta was (and still is) a place of national significance. The Greek Revolution of 1821 is said to have started at a monastery (Agia Lavra) there, where the local Metropolitan blessed the gathered leaders of the upcoming war. A celebratory 1896 edition, on the occasion of the first modern Olympic Games (hosted in Athens that year), even chronicles the Peloponnese railway saga.  Regarding the rack train, it references the exquisite natural environment, Agia Lavra and another historical monastery as good reasons to give it a ride. Fair enough, but still somewhat vague. What else was there that made that region stand out from the others? Here the rationale gets a step up.

source

Kalavryta was home to a wealthy, powerful family. It happened that a member of the family served as Member of Parliament when the railway project was on fire. This man persuaded the PM of the vital role a railway connection was to play in the development of the surrounding areas. Provided that a scion of the same family serves in the current Greek Parliament, too, this “local interest cuddling” reasoning gets some traction, in my view.

Even if the decision was just that, local patronizing, it still held some more rational economic – political water: Back then, the cost of sending wheat from the (fertile) plateau down to sea level was twice as high the cost of shipping said wheat from fucking Russia to Greece (compare 22km to, dunno, 2200km). And why not just import the dang thing then? Well, Greece had had the “honor” to be at the receiving end of a naval pacific blockade by the era’s great forces in 1886, so it perhaps had reached the conclusion that food security was something to be pursued.

source

The rack train project was initiated by law in 1889 and (after absorbing 3x the envisaged cost plus 5x the scheduled time of completion, effectively cutting short any ideas of expanding it further towards Tripoli) began its inaugural journey in, well, 1896.

It turns out that the whole railway affair was overhyped and demand for train services did not to really stretch that far to meet supply, not to mention the appearance of competitive means of transport (steamboats and roads). The rack train, however, remained the sole anchor of reliable transport till the 1970s, when roads proper were built. In the meantime, it also became a traveler’s sensation, too, confirming the positive light that celebratory book shone on it 120+ years before.

Africa’s quest for sovereignty

That’s the title of this excellent piece by Toby Green, a historian at King’s College London. Green does a wonderful job of highlighting all of the problems that African societies face today: corruption, poverty, and my personal favorite, “neoliberalism.” Neoliberalism is just shorthand for loans that Western financial institutions give to African states. These loans are usually only given if African states promise to follow certain guidelines that Western financial institutions have drawn up. The end result is corruption and poverty.

I can agree that it’s a terrible system, even if I think the name Green has given it is dumb.

Throughout the piece, Green makes a good case for fundamental change in Africa. The problem is that he mistakenly thinks that this change can occur via the states that are currently in place in Africa. He mistakenly thinks that Ghana, Nigeria, Uganda, or Angola, to name some of the more prominent examples, have what it takes to enact the changes necessary for a fundamental shift.

Green argues that “unipolar American and Western European hegemony” (which by definition cannot be unipolar if there’s two poles, unless…) is responsible for Africa’s problems, and that the continent’s early independence leaders should be looked to for guidance. The problem with this, as Hendrik Spruyt has pointed out, is that the continent’s early independence leaders didn’t listen to anybody but themselves. They simply sought to graft their visions of what Africa should be onto the existing colonial governance system of the various European powers.

These early independence leaders sought to forge nations out of the colonies that the Europeans had haphazardly patched together. There were other elites on the African continent who wanted something different from what Africa’s early independence leaders wanted. Some of these elites were nationalists who wanted their states to be fully recognized equals on the world stage, just like the early independence leaders. The difference between these nationalists, and the early independence leaders, was that they wanted to abolish colonial boundaries and restore pre-colonial boundaries which would then be recognized as states within the Westphalian states-system. Like so:

Early Independence LeadersOther, actual Nationalists
Wanted African states to inherit colonial boundariesWanted African states to abolish colonial boundaries and restore old ones to prominence
Wanted to create and forge national identities out of these colonial boundariesWanted to harness the power of already-existing national identities by tying them to internationally-recognized states

The early independence leaders obviously won out. The borders of European colonialism were maintained and enshrined within the Westphalian states-system that soon encompassed the globe.

Green and other Leftists think that the above column on the left is a perfectly acceptable way to continue, and that the problem is not the states-system that Africa’s early independence leaders established, but rather the “unipolar hegemony of America and Europe.” Without a rethink of the fundamentals, Green and other Leftists are going to continue inadvertently contributing to the immiseration of Africa.

Don’t get me wrong! The current loan system is awful. It’s terrible. But it’s exactly what you’d expect to get from an order like the one outlined above.

If people are serious about unleashing Africa then they need to look to the above column on the right. The map of the nations that were ignored by Africa’s early independence leaders (ignored, and eventually slaughtered, oppressed, persecuted, and imprisoned) is still there. You can find good maps of nations in Africa — often condescendingly referred to as “ethnic groups” rather than nations – that are superimposed on the map of African postcolonial states. Here’s the best one in the world at the moment.

Green implicitly recognizes that there’s something wrong with the postcolonial African state of Africa’s early independence leaders. He can tell that the column on the left is somehow off:

[…] in many African countries, traditional chiefs [are] more respected than elected officials […] A more damning indictment of the failings of the democratic model promoted across Africa […] is hard to find.

What he can’t seem to do is see that the column on the right lines up almost perfectly with the views that Africans have of their chiefs. Now, the chiefs are by no means revered by everybody in Africa, and there is a strong, if minute, anti-chief current throughout the continent because not everybody wants an Africa based on the tenets of nationalism. The columns above only highlight two strains of thought on how Africa should be governed. There are others, most notably Islamist proposals, but the one that libertarians (and, indeed, most Leftists) should find most attractive is that of the African federalists.

African federalists competed with the two nationalist camps when it became apparent that things were about to change vis-à-vis Africa’s relationship with Europe. While the nationalists embraced decolonization, which meant independence from European colonial rule, the federalists embraced integration with their colonizers. They argued that African colonies could, and should, federate with European countries. This federation would mean that African provinces would stand on equal footing with older provinces of European states. African provinces would be able to practice self-government without resorting to autarky. Like so:

Early Independence LeadersOther, actual NationalistsFederalists
Wanted African states to inherit colonial boundariesWanted African states to abolish colonial boundaries and restore old ones to prominenceWanted African colonies to become represented provinces in federated European polities
Wanted to create and forge national identities out of these colonial boundariesWanted to harness the power of already-existing national identities by tying them to internationally-recognized statesWanted full citizenship rights within the federated polities that would replace the old European empires

In hindsight, the federalists were right to deplore the idea of independence from Europe. The Westphalian nation-state, at least as it was envisioned by Africa’s early independence leaders, has been a disaster for Africa. It’s also clear that the federalists had an uphill climb, not only because decolonization-nationalism were all the rage but also because several of the Europeans who ran the colonies did not themselves have federated orders. The French and Portuguese had no experience with federalism, and the Spanish and British had weird federalisms based on monarchical principles. The Dutch and the Americans both had good models to emulate, but they didn’t have any African colonies and the idea of African colonies federating with Dutch or American states was out of the question in the 1960s and 1970s. That doesn’t have to be the case for today.

There’s nothing in this world that says the ideas of Africa’s federalists can’t be put in to practice today. There’s nothing to prevent the world’s most powerful polity, the compound republic of the United States, from entertaining the ideas put forth by Africa’s federalists. Nothing, that is, except the conservatism of Western and Western-educated elites, who believe that Africa’s early independence leaders were somehow right, because even though the results of their actions have gone horribly wrong, their ideals were pure in motive.

Sovereign territory and decolonization movements

But while adopting sovereign territoriality as the dominant script, they were far more cautious in accepting the principle of self-determination for all nationalist claims. While claiming the right of national self-determination as a rhetorical tool in the struggle with the metropolitan powers, they simultaneously denied those claims to indigenous groups within the territorial state that the nationalist leaders envisioned. The Dutch were not incorrect in asserting that the nationalist (Javanese) claim for Indonesian independence subverted the possible independence of many areas and ethnic groups within the East Indies. Sukarno himself of course recognized that “the Dutch had invented Indonesia” given that it had never been a coherent political entity before. [Sukarno] was eager to lay claim to the entire territory as a unified state on the principle of sovereign equality with other states, disregarding local demands for true national self-determination.

This is from the great Hendrik Spruyt, and you can read the whole thing (pdf) here.

I have two takeaways for NOL: first, the people who led decolonization efforts after WWII exploited the maps drawn up by imperial powers; they were not nationalists, they were cosmopolitans who had been educated in European capitals and who had borrowed the logic of nationalists in those capitals. Calls for federation instead of independence/decolonization were few and far between, but they did exist. Adam Smith called for union between the UK and its North American colonies. Several African statesmen called for federation between their lands and France. I believe some Indians called for federation between their land (which included present-day India, Pakistan, and Bangladesh) and the UK, but I need to do more research on this. In Hawaii, the federalists actually won out.

Second, the current narrative, or script as Spruyt calls it, still doesn’t give local/indigenous actors their due. The current Westphalian script — undergirded by the principle of sovereign equality with other states – still treats the leaders of decolonization like victims of imperialism who fought against the odds to defeat intransigent European oppression. There is simply not much being said about the people who called for greater representation within the European imperiums and for federal restructuring of these imperiums.

A third takeaway is that libertarians have a much better alternative to adopt than shallow anti-imperialism, which is just a form of antiwar nationalism: they could call for federation with polities as a foreign policy doctrine. They could actively build alliances with those factions that were squashed by nationalists who disregarded the claims of other groups, with the aim of integrating these societies into a federal order.

Albania: People and Ruins

During my long traveling over Europe this summer, among other areas, I ventured to Albania, a country where houses frequently do not have numbers and where I located the building where a friend of my youth now lives by a drawing on a gate. This is a country where the so-called oriental bazaar is buzzing everywhere, where towns literally hang on cliffs, and where one easily runs across the ruins of the Roman, Byzantine, and Ottoman legacy of the country and the “archaeology” of the recent communist past (small concrete family bunkers, tunnels for the former communist nomenklatura, monumental sculptures and mosaics in the socialist realism style).

It was interesting to see how this country, which lived much of the 20th century under the most vicious communist dictatorship (1944-1990), is now trying to live a normal life.  To some extent, Albania is very similar to present-day Russia: decades of the negative natural selection under communism killed much of self-reliance, individual initiative, and produced the populace that looks up to the government for the solutions of their problems. For the past thirty years, a new generation emerged, and things did dramatically change. Yet, very much like in Russia, much of the populace feels nostalgia for the “good” old days, which is natural.

According to opinion polls, 46% of the people are nostalgic for the developed communism of dictator Enver Hoxha (1944-1985), an Albanian Stalin, and 43% are against communism; the later number should be higher, given the fact that many enterprising Albanians (1/4 of the population) live and work abroad.  During the last decades of its existence, Albanian communism slipped into a wild isolationism of the North Korean style. Except for Northern Korea and Romania, all countries, from the United States, Germany, UK (capitalist hyenas) to the USSR, China, and Yugoslavia (traitors to socialism), were considered enemies.  Incidentally, Albanian communism was much darker and tougher than the Brezhnev-era USSR. Nevertheless, as it naturally happened in Russia and some other countries, in thirty years, the memory of a part of the population laundered and cleansed the communist past, and this memory now paints this past as a paradise, where everyone was happy and looked confidently into the future, where secret police and labor concentration camps existed for a good reason, and where the vengeful dictator appears as a caring father.

In the hectic transition to market economy and with the lack of established judicial system, there naturally emerged a widespread corruption, nepotism. But, at the same time, small business somehow flourishes. The masses and elites of the country aspire to be united with neighboring Kosovo since both countries are populated by Albanian majorities. On top of this, Kosovo is the birthplace of Albanian nationalism.  However, unlike current Russia, which is spoiled with abundant oil and gas resources (the notorious resource curse factor), corrupt Albanian bureaucrats that rule over a small country exercise caution. Although that small country is too blessed with oil, natural gas, chromium, copper, and iron-nickel, they do not waste their resources on sponsoring geopolitical ventures and harassing their neighbors. For themselves, the Albanians resolved the Kosovo issue as follows: we will be administratively two different states, but de facto economically and socially we will be tied to each other, and all this makes life easier for people, preventing any conflicts. Not a small factor is that, unlike, for example, Russia or Turkey, Albanian nationalism is devoid of any imperial syndromes, and therefore there is no nostalgia for any glorious lost empire. The fact that Albania is a member of NATO also plays a significant role, which forces the Albanian elites behave. Acting smartly, instead of geopolitical games, they decided to fully invest in the development of the tourism business, believing that, in addition to mining their resources, this is the best development option.

Hayek, or the Recursive Model of the Rule of Law

What Friedrich A. Hayek sought with his three volumes of Law, Legislation and Liberty was to propose a legal-political system in which the Rule of Law principle would not be de facto replaced by the rule of men through laws (Rule by Law).

To do this, he built a recursive model of a legal system whose initial conditions were the legal customs as the only source of law. Thus, in such a system, the rule of recognition  –in the sense of H.L.A. Hart’s concept– would initially regard the customary law as the only set of rules to be enforced by the government.

In the said model of legal system, the law is separated from the state, which enforces the former and legitimises itself by that enforcement. Sovereignty resides in the law and the state is its agent and executor – but, without the said enforcement, the customary law -the initial condition of the recursive model- would only be natural law.

From a genealogical point of view, in Middle Ages monarchs were entitled as rulers by a law of succession derived from customary norms and it is from that mediaeval period that the term “Rule of Law” comes: Since their prerogative of ruling had come from legal customs, the rulers had the moral duty of enforcing them – which, in turn, acted as a limit to the power of the rulers, or at least to their legitimacy.

Evolutionarily, the administration of public affairs -as related by Max Weber in his General Economic History– ceased to be in the hands of wise men and mandarins, advisers to the monarchs, to become a matter managed by jurists, who incorporated for the decision-making and its justification the procedures and figures of private law: the social contract, the commission, decisions based on evidence, etc.

Such evolutionary emergence of the public law set new boundaries to the legitimate use of power by the rulers, in many occasions needing a written document to warrant them, such as the Magna Carta, the Bills of Rights or the declarations inserted in the Modern constitutions.

Consequently, successive layers of legality were added to the initial conditions of Hayek’s model of political legal system: constitutional laws, declarations of rights, principles and guarantees, procedural laws and statutes. It was these same legal concepts of private law that allowed giving a legal foundation to the nascent republics of the Late Middle Ages, for example, the legal figures of association, representation, etc..

However, Hayek already complained in The Constitution of Liberty –and later in Law, Legislation and Liberty again- about the consequences of the sovereignty of parliaments, that is, the competence of the legislative chambers to enact laws, replacing legal customs. It was the principle of popular sovereignty that rendered obsolete the principle according to which customary law acted as a limit to the rulers separated from the people, since the people went on to govern themselves and make their own laws.

This emancipatory narrative -in terms of Jean Francois Lyotard- collides with the evidence that, on numerous occasions, we do not obtain in return the Rule of Law but rather the rule of men through laws emanating from political will. Consequently, the path is open for critics of the Rule of Law to denounce its inconsistencies: a government of laws created by the rulers themselves is a mere masking of the political will, which is not legitimated by law but by the pure imposition of the force.

That is why the ultimate message of Hayek’s legal and political works consists of a sort of return to initial conditions of his model of relations between law and politics: legal norms are ineffective without the enforcement provided by the public force, but the process of creating them can be disentangled from that enforcement.

Of course, the choice by the political system on which norms to enforce -that is, the enunciation of a rule of recognition- can mean in itself an act of creation of law; but if, on the other hand, a constitutional system foresees the separation of the legislative functions from the functions of government, obliging the latter to enforce the laws emanating from the former, the distinction between the Rule of Law over the rule of the men is restored.

As Hayek himself recognized in his work, his proposal to create two separate assemblies, one legislative and the other governmental, is not really a proposal intended to be put into practice, but rather an ideal model that exemplifies a concept that is as fundamental as it is abstract and elusive: the separation between law and political power.

Beyond the feasibility of Hayek´s model, it does provide a demarcation criterion between liberal democracy and authoritarianism: the one that indicates that the main duty of a government towards its citizens is to enforce the rules of peaceful coexistence that respect the so-called fundamental rights, such as life, personal liberty and property, and that any program of social transformation or economic development can never justify their abrogation. Thus, any rulers who do not take into account such institutional restrictions to their policies would be involved in a true road to serfdom.

Two Bald Eagles: Symbols of Divided Attitudes?

I spotted two Bald Eagles today in Cincinnati, which is really fitting for the Fourth of July. The two Bald Eagles—one indolent and one vigilant—capture not only the attitudes of two influential figures in American politics about this national symbol that was hotly debated till 1789, but they also reflect the fractured character of these United States.

You probably already know that Benjamin Franklin was an outspoken detractor of the bald eagle. He stated his disinterest in the national symbol in a letter to a friend:
“I wish the bald eagle had not been chosen as the representative of our country; he is a bird of bad moral character; like those among men who live by sharping and robbing, he is generally poor, and often very lousy. The turkey is a much more respectable bird and withal a true, original native of America.”

In contrast, President John F. Kennedy wrote to the Audubon Society:
“The Founding Fathers made an appropriate choice when they selected the bald eagle as the emblem of the nation. The fierce beauty and proud independence of this great bird aptly symbolizes the strength and freedom of America. But as latter-day citizens we shall fail our trust if we permit the eagle to disappear.”

The two Bald Eagles, which symbolize, in my estimation, two divergent historical viewpoints, show us that American history is splintered into sharp conceptions of the past as it has been politicizedly revised to forge a more perfect union. There is little question that the tendency toward seeking out varied intellectual interpretations of US history is unabating and maybe essential to the growth of a mature republic. On holidays like the Fourth of July, however, a modicum of romanticism of the past is also required if revisionist histories make it harder and harder for the average person to develop a classicist vision of the Republic as a good—if not perfect—union and make it seem like a simple-minded theory. 

The two Bald Eagles aren’t just symbolic of the past; they also stand for partisanship and apathy in the present toward issues like inflation, NATO strategy, Roe v. Wade, and a variety of other divisive concerns. In addition, I learned there is an unfortunate debate on whether to have a 4th of July concert without hearing the 1812 Overture. For those who are not familiar, it is a musical composition by the Russian composer Tchaikovsky that has become a staple for July 4th events since 1976. 

In view of this divisiveness here is my unsophisticated theory of American unity for the present moment: Although the rhetoric of entrenched divisiveness and the rage of political factions—against internal conflicts and international relations—are not silenced by the Fourth of July fireworks, the accompanying music, festivities, and the promise of harmony, they do present a forceful antidote to both. So why have a double mind on a national ritual that serves as a unifying force and one of the few restraints on partisanship? Despite the fact that I am a resident alien, I propose preserving Tchaikovsky’s 1812 Overture, arousing the inner dozing Bald Eagle, and making an effort to reunite the divided attitude toward all challenges. The aim, in my opinion, should be to manifest what Publius calls in Federalist 63 the “cool and deliberate sense of community.”

Have a happy Fourth!

Stimuli For Your Moral Taste Buds [June 2022 Edition]

Today’s food-for-thought menu includes Eco-Feminism, Indics of Afghanistan, the Fetus Problem, a Mennonite Wedding, the Post-Roe Era, and the Native New World. I’m confident the dishes served today will stimulate your moral taste buds, and your gut instincts will motivate you to examine these themes in greater depth.

Note: I understand that most of us are unwilling to seek the opposing viewpoint on any topic. Our personal opinions are a fundamental principle that will not be altered. However, underlying this fundamental principle is our natural proclivity to prefer some moral taste buds over others. This series represents my approach to exploring our natural tendencies and uncovering different viewpoints on the same themes without doubting the validity of one’s own fundamental convictions. As a result, I invite you to reorder the articles I’ve shared today using moral taste buds that better reflect your convictions about understanding these issues. For instance, an article that appeals to my Care/Harm taste bud may appeal to your Liberty/Oppression taste bud. This moral divergence reveals different ways to look at the same thing.

The Care/Harm Taste Bud: Eco-feminism: Roots in Ancient Hindu Philosophy

The Nature-Culture Conflict Paradigm today reigns supreme and seeks to eradicate cultures, societies, and institutions that advocate for and spread the Nature-Culture Continuum Paradigm. Do you see this conflict happening? If so, can you better care for the environment by adopting a Nature-Culture Continuum paradigm? Is there anything one may learn from Hindu philosophy in this regard?

The Fairness/Cheating Taste Bud: 9/11 FAMILIES AND OTHERS CALL ON BIDEN TO CONFRONT AFGHAN HUMANITARIAN CRISIS

Due to a focus on other issues in Afghanistan, such as terrorism, food and water shortages, and poverty, the persecution of religious minorities in the nation is not as generally known, despite the fact that it has been a human rights crisis for decades. Ignorance of this topic poses a serious risk to persecuted groups seeking protection overseas. Western governments have yet to fully appreciate the risks that Afghan Sikhs and Hindus endure. I also recommend this quick overview of the topic: 5 things to know about Hindus and Sikhs in Afghanistan.

The Liberty/Oppression Taste Bud: Biological Individuality and the Foetus Problem

As I’ve discovered, abortion was one of the earliest medical specialties in American history when it became entirely commercialized in the 1840s. As a result, the United States has been wrestling with moral issues about abortion for 182 years! The abortion debate has gone through rights-based assertions and advanced to claims about the policy costs and benefits of abortion and now appears to have returned to rights-based arguments in the last 50 years. Regardless of where you stand on this debate, this much is clear: in the U.S., the circle of moral quandary surrounding abortion never closes. Nevertheless, what is the source of the moral ambiguity surrounding abortion? Can the philosophy of biology help us better comprehend this moral quandary?

Some philosophers would argue that the issue of biological individuality is central to this moral dispute. But why is biological individuality even a point of contention? Counting biologically individual organisms like humans and dogs appears straightforward at first glance, but the biological world is packed with challenges. For instance, Aspen trees appear to be different biological units from above the ground; nonetheless, they all share the same genome and are linked beneath the ground by a sophisticated root system. So, should we regard each tree as a distinct thing in its own right or as organs or portions of a larger organism?

How Aspens Grow?

Similarly, humans are hosts to a great variety of gut bacteria that play essential roles in many biological activities, including the immune system, metabolism, and digestion. Should we regard these microorganisms as part of us, despite their genetic differences, and treat a human being and its germs as a single biological unit?

NIH scientists find that salmonella use intestinal epithelial cells to colonize the gut

Answers to the ‘Problem of Biological Individuality’ have generally taken two main approaches: the Physiological Approach, which appeals to physiological processes such as immunological interactions, and the Evolutionary Approach, which appeals to the theory of evolution by natural selection. The Physiological Approach is concerned with biological individuals who are physiological wholes [Human + gut bacteria = one physiological whole], whereas the Evolutionary Approach is concerned with biological individuals who are selection units [Human and gut bacteria = two distinct natural selection units].

Is a fetus an Evolutionary individual or a Physiological individual? If we are Evolutionary individuals, we came into being before birth; if we are Physiological individuals, we come into being after birth. While the Physiological Approach makes it evident that a fetus is a part of its mother, the Evolutionary Approach makes it far less clear. But is there an overarching metaphysical approach to solving the problem of biological individuality? Can metaphysics (rather than organized monotheistic religion) lead us to a pluralistic zone where we can accept both perspectives with some measure of doubt?

Philosophy and Phenomenological Research

The Loyalty/Betrayal Taste Bud: What I Found at a Mennonite Wedding

Do you consider the United States to be a high-power-distance or low-power-distance culture? Coming from India, I used to see the U.S. as the latter, but in the last 12 years of living here, it is increasingly becoming the former.

Does your proximity to an authority strengthen or lessen your loyalty?

https://www.hofstede-insights.com/country-comparison/france,india,the-usa/

The Authority/Subversion Taste Bud: The Post-Roe Era Begins Political and practical questions in an America without a constitutional right to abortion.

[In the link above, make sure to listen to both Akhil Amar and Caitlin Flanagan]

I also recommend reading Why Other Fundamental Rights Are Safe (At Least for Now)

Is there a flaw in the mainstream discussion of the U.S. Constitution that the abortion debate has brought to light? In my opinion, although predating the U.S. federal constitution and being significantly more involved in federal politics and constitutional evolution, each American state’s constitution is widely ignored. Keep in mind that state constitutions in the United States are far more open to public pressure. They frequently serve as a pressure release valve and a ‘pressuring lever’ for fractious U.S. national politics, catalyzing policy change. Regrettably, in an era of more contentious national politics, mainstream U.S. discourse largely ignores changes to state constitutions and spends far too much time intensely debating the praise or ridicule the federal Constitution receives for specific clauses, by which time the individual states have already shaped how the nation’s legal framework should perceive them. Altogether, a federal system, where individual state constitutions are ignored, and conflicts are centralized, is the American political equivalent of Yudhishthira’s response to the world’s greatest wonder in the thirty-three Yaksha Prashna [33 questions posed by an Indic tutelary spirit to the perfect king in the Hindu epic of Mahabharata].

The Sanctity/Degradation Taste Bud: The Native New World and Western North America

The emergence of a distinctly Native New World is a founding story that has largely gone unrecorded in accounts of early America. Here’s an excerpt from the article:

To round off this edition, a Western movie question: Are there any examples of American Westerns developed with the opposing premise—valuing the First Nation’s People’s agency, which has gained historical support? Why not have a heroic Old World First Nation protagonist who safeguards indigenous practices and familial networks in a culturally diverse middle ground somewhere in the frontier country, shaping and influencing the emerging New World? Can this alternate perspective revitalize the jaded American Western movie genre?

[Here’s the previous edition of Stimuli For Your Moral Taste Buds]

Lit in Review: The impact of epidemics on historical economics, part 1

The most recent Journal of Economic Literature includes four essays on how historical epidemics and pandemics affected major macroeconomic variables. Together, they account for 170-someodd pages, which I will summarize below. Each of them is a detailed literature review on decades of historical research. While they are dense, they are for the most part readable. Part 2 will summarize three articles from The Journal of Economic Perspectives on Macro Policy in the Pandemic.


“Modern Infectious Diseases: Macroeconomic Impacts and Policy Responses” – D. Bloom, M. Kuhn, and K. Prettner The greatest strength of this paper is in critically discussing the various methodologies and theories we have available to even answer the question of how epidemics affect the economy. This is aside from the problem that “narrow economic considerations take inadequate account of the ethical, normative, and political dimensions of decisions that relate to saving lives.”

Generally, micro-based methods that focus on the impacts on individuals and add them up ignore indirect, complex interactions that macro-based methods do capture. For instance, increasing the probability that a 15 year old survives to age 60 by 10 percentage points (roughly equivalent to moving from India to China) increases labor productivity by 9.1 percent. On the other hand, most macro models miss behavioral responses are an insufficiently complex. One problem is that my individual incentive to take preventative actions depends on everyone else. This is something I noticed in my own life – here in Texas where almost no one wore a mask, I had a strong incentive to stay masked myself; when we traveled to any state west of us, almost everyone was masked and surfaces were regularly cleaned, so I felt much less urgency to wear a mask myself. Their conclusion is that diseases will be difficult to eradicate via “private actions alone.” They therefore conclude that some form of government lockdown is likely to be warranted.

Epidemics will have different impacts on the economy depending on a) disease-specific characteristics (how much do they impact working-age population, how much long-term damage do they do, etc) b) population characteristics, particularly how much poverty there is and c) country characteristics, particularly government capacity. Because of this, the same epidemic might have minor impacts in one country, create a poverty trap in a second, impose economic hardship in a third while leaving long-run health mostly untouched, or leaving the economy mostly unaffected but harming health and increasing the incidence of other diseases in a fourth.

“Epidemics, Inequality, and Poverty in Preindustrial and Early Industrial Times” – G. Alfani Most important point: epidemics reduce poverty by either a) changing society/laws/markets in ways that are pro-poor and b) killing more poor people than other socioeconomic groups. If a particular disease leads more to the latter, then there will be very small impacts of disease on poverty. Standard intermediate macroeconomics says that wages come from productivity and the more land or physical capital each worker has, the higher their wages will be. Because of this, the usual story I tell my students about the Black Death that killed off 20-35% of western Europe but left the capital alone is that it raised wages for the poorest and created a large middle class, setting the stage for the Renaissance. Alfani shows Gini coefficients [measures of inequality] falling by 30 percent or more.

But this didn’t happen everywhere. “Government intervention may have suppressed wage bargaining for an extended period of time” in post-Colombus Mexico (Scheidel 2017), or Black-Death-era Spain (Álvarez-Nodal and Prados de la Escosura, 2013), and Poland.

And it didn’t happen always. Repeated epidemics in the 17th century that were as deadly as the Black Death in some communities didn’t seem to reduce inequality at all, either in total or compared to what happened in communities that were unaffected. Why not? One difference is that when epidemics happened more often, governments changed inheritance rules to ensure large amounts of wealth stayed controlled by only a few. He also argues that demand for labor will decrease, and if it decreases as much as the labor supply, wages may not increase at all. On top of these effects, I infer from his paper that later epidemics killed a higher percent of skilled workers than the Black Death did, and that stunted any change in the skill premium. Then there are diseases like cholera that not only hit poor areas hardest, but tended to increase and concentrate the negative aspects of poverty.

Alfani and Murphy (2017): “From the fifteenth century, most plagues were particularly harsh on the poor. This has to do both with the poor’s relatively unhealthy living areas, but also with how they were treated during the epidemics. Once doctors and health authorities noticed that plague mortality tended to be higher in the poorest parts of the city, they began to see the poor themselves as the potential culprits of the spread of the infection.” That attitude is contrasted with efforts to improve sanitation and nutrition to both reduce disease and improve the lives of the poor.

“The 1918 Influenza Pandemic and Its Lessons for COVID-19” – B. Beach, K. Clay, and M. Saavedra “The first lesson from 1918 is that the health effects were large and diffuse” and we may never know just how large because of inaccurate record keeping, “issues that also undermine our ability to quantify the impact of COVID-19.” The second lesson: The Spanish flu epidemic was more likely to kill working-age adults, so it had a major long-run labor supply shock which COVID is unlikely to cause, even though both have caused recessions.

Among the differences between the two are that epidemics were not unusual in 1918 and it happened right at the end of World War I, which had upset many economies already and led to falling productivity for reasons unrelated to the pandemic. We have also documented a wide range of negative health impacts from the 1918 epidemic and are only beginning to document the longer-term impacts of COVID, which will have to be studied in the future.

Interestingly, while there was some attempt at social distancing and closing society down in 1918, it was much shorter-lived and not as severe as what we tried during COVID. While they were “somewhat effective at reducing mortality in 1918, … the extent to which more restrictive [regulations] would have further reduced pandemic mortality remains debated.”

“The Economic Impact of the Black Death” – R. Jedwab, N. Johnson, and M. Koyama There are three primary lenses through which economists have viewed the Black Death. Malthusians argue that smaller populations increase wages (by raising the capital/labor or land/labor ratios) and lower inequality. The “Smithian” view is that larger populations are necessary for a greater division of labor, specialization, and larger markets that support important technologies. The third strand focuses on the role of institutions, both as causes and effects.

“In the very short run [the Black Death] caused a breakdown in markets and economic activity more generally.” In a longer run sense, though, England, Spain, and Italy had very different divergences between wages and productivity. Put another way, England had larger Smithian effects than Spain or Italy and Italy had the largest Malthusian effects. Thus, rather than one model being “right” and the other “wrong,” there is more of a continuum, moderated in part by institutions.

In the years after the plague, people moved out of rural areas to the cities that had been hardest hit because wages had increased more there, which also increased reforestation. In Western Europe, workers’ bargaining power increased, eroding the institution of serfdom. Craft guilds increased dramatically, though their net effect is questionable – decreasing competition through monopoly power but increasing human capital accumulation through apprenticeships. States grew in size and influence, perhaps because there were fewer people to oppose them, with growing taxation accompanying investment in public health and the ability to impose quarantines.

On Persons, Individuals, and Humans

It is only from a notion of the human, common to all men, that the concept of person can be dissolved into the idea of individual.

The relevance of the concept of person lies in its ability to describe functional relationships with its environment: sui juris or alieni juris, noble, patrician, commoner, serf or lord, father, minor, capable, incapable, etc. In pre-modern times, according to each function, a normative system exclusive to caste, position or estate, known as “privilege”, corresponded.

Rather, Modernity dissolves fixed personal relationships into an undifferentiated diagram of spheres of individual autonomy. Each human being ceases to be a person attached to a certain fixed function in the social fabric and, by the mere fact of being human, is the holder of his sphere of individual autonomy, equal to that of any other human being.

The legal system ceases to govern particular relationships between people to become a structure empty of intentions and purposes, which only determines procedures and delimits equal and predictable fields of interaction and clear methods for the resolution of disputes among the holders of the different spheres of individual autonomy.

The principle ceases to be that of difference to become that of equality. The difference becomes the exception, to be justified on a functional basis that results in a public benefit.

However, in the non-political sphere, that of civil society, the difference does not disappear, but is expressed in each of the individual exceptionalities, within each respective sphere of individual autonomy, while it is accidental and irrelevant to the legal-political system.

There are certain special situations framed within specific legal regimes, such as minority and intra-family relations, which enshrine assistance obligations, usufruct rights and a system of representation and guardianship.

Consequently, the role of the public sphere within civil society is defined by the procedure to be followed to settle the conflicts that could arise from the collision of the different spheres of individual autonomy.

From the moment in which each human being is an autonomous individual, the legitimate exercise of power in relation to the population does not consist in giving specific orders to subjects but in administering a set of procedures whose specific purpose is to serve as a means for different individuals settle their disputes peacefully.

Of course, in Modernity and in liberal democracies relations of command and political obedience subsist, but within the governmental structures themselves, which in turn incorporated procedural rules that limit discretion in the exercise of power and establish functions and hierarchies that define competencies and delimit individual responsibilities.

However, both modern government structures and the legal consecration of a social structure composed of equal individuals in dignity and respect are not the result of an invention but the consequence of a historical evolution whose becoming does not cease and whose hindrances persist in the field of the aforementioned civil society.

That the differences between people are exclusively functional and that such functions report a benefit to all the individuals involved, in such a way that none of them is used exclusively as a means, but is seen as an end in itself, is an imperative for the public sphere, but only a programmatic aspiration in the field of civil society.

In turn, that each person deserves equal consideration and respect is a discovery in the true sense of the word. Quentin Skinner in “The Foundations of Modern Political Thought” recounts the role played in the Late Middle Ages by the discussion that every person was endowed with an immortal soul, deserving of salvation, for the subsequent conceptualization that every human being is worthy also of legal protection regarding their fundamental interests, such as their life, their personal freedom, or their possessions.

Regarding the natural law doctrine of human rights, which states that human beings enjoy a certain set of guarantees and rights against the state and against other people, it is usually dismissed as metaphysical.

However, such statement can be understood more clearly if it is related to its historical evolution: the different freedoms already existed but assigned to different people according to their caste or status, who had an immediate and specific interest in their protection.

To cite an example, in the Partidas of Alfonso X of Castille, we find every detail of social life regulated: some had the right to bear arms but not to work, since they had to be available to the king in his court to eventually go to war; others had the right to exercise a certain trade or profession, excluding those who did not belong to their corporation, but they were not free to change their activity, neither in terms of their subject matter nor their geography. In the pre-modern world, the holders of freedoms had a specific interest in defending them, but their ownership depended on circumstances that, in the vast majority of cases, were out of their control and, in others, obsolete in terms of their functionality.

Given that this legal-political system had very little plasticity to adapt to changes in the surrounding circumstances, it was generally inefficient, stagnant, and unstable and, therefore, conflicts manifested themselves in recurrent revolts.

Modernity consisted in the universalization of liberties. This means that freedoms – or immunities against power – that already existed and whose entitlement was limited to reasons of belonging to certain castes or estates, to the exclusion in many cases of one another, began to be extended to all human beings by the mere fact of being such.

That is to say, there is nothing metaphysical in the natural law doctrine of human rights. It actually consists of the universalization of rights that already existed and were recognized.

The novelty that this brought is that each human being ceased to be considered as a person in relation to his family, his social status or his caste, to be considered as an autonomous individual and equal in rights to any other, holder of rights that he was actively interested in exercising as well as others whose content he hardly had any news or specific interest.

In turn, men exchanged differentiated rights that protected certain personal interests in exchange for new abstract freedoms, the same for each of the remaining individuals. As a result, each person gained potential spheres of action and saw specific regions of power restricted.

The nobleman gained a freedom to work and trade that he may or may not have an interest in exercising, but he lost the power he had over his serfs or was displaced by commoner bureaucrats in government functions. The shoemaker gained the freedom to emigrate to other cities or to change his trade to that of a blacksmith, in which he may or may not be interested, but he also received competition in his own town from other new shoemakers who emigrated from other latitudes, who effectively exercised such rights.

Such transformations and their discontents can be verified in the conservative authors of the beginnings of the Contemporary age, as is the case of Charles Dickens, among others.

That is why the universalization of fundamental rights -for the English tradition- or natural rights -for the American conception- constitutes both a discovery of intellectual research on historical evolution and a political program.

Whether such an extension is desirable and to what extent it should be continued or reversed largely defines political positioning from right to left. For this reason, historical evolution is not a legitimizing device in itself, but a process of discovery of various forms of social and political organization that is subject to a critical evaluation regarding which institutions and practices to incorporate, preserve, resist or modify.

On the open texture of conflicts

Just as language carries with it a phenomenon of open texture, according to which the reference and meaning of some of its terms are modified in response to changes in the environment — for example, saying that the head of state is commander in chief of the armed forces implies different denotations and connotations as war machines, communications, and command styles evolve -, conflicts that are prolonged over time also undergo changes in the terms that define them, as their surrounding context varies.

Thus, a dispute between individuals about the ownership of a certain asset, such as that of two heirs in dispute over the award of a property that is part of the hereditary heritage, will have to vary in intensity according to the changes in the market value of the said asset and according to the changes in the needs of those heirs as well.

Note, likewise, that the said transformation of the conditions in no way affects the conformation of the hereditary rights, but rather it is in the interest of each of the parties to enforce them.

Under certain circumstances, some of the said heirs will have to prefer to maintain the undivided inheritance and under others they will have to activate the dissolution of the hereditary community, generating a conflict in case of disparity among the heirs.

Although rights protect interests -such as life, personal liberty or stability upon possession-, not all interests deserve legal protection -such as the claim of an individual to hold a monopoly in the production of a certain good- and, among those interests which do enjoy legal protection, it will be relative and hierarchical.

Given that a legal system forms a set of consistent normative parameters, the changes in the decisions of individuals are motivated by variations in the relative value of the interests protected by said legal system, also assuming that such individuals are rational agents – i.e., they have transitive preferences.

As a corollary of the above, the normative system, while remaining identical to itself, will have to be neutral for the dynamics of the conflict, since the parties will have shaped their plans and expectations in accordance with their prescriptions.

That is why we often find analyses devoid of axiological and merely descriptive approaches. This does not mean that the rules, be they positive or natural, are not observed, but rather that a degree of compliance and constant enforcement is verified, which makes it possible to look for the reason for the changes in the decisions of the agents in other conditioning factors, such as the technology, the relative prices of goods, climatic phenomena, etc., etc..

Nor does this mean that the law does not evolve or undergo disruptive changes: there are legislative changes and judicial precedents that are modifying the content of the norms and, in turn, the norms themselves suffer the consequences of the open texture of the language in which they are expressed.

When these changes do not respond to a change in the value of the interests, but respond to a need of the legal system itself to maintain a stable and predictable order of events, the legal system maintains its neutrality, since it is transformed, jurisprudential or legislatively, when its formulations – even when they have a high degree of enforcement – are not sufficient to maintain a peaceful order of human interaction and, therefore, legal innovation has the function of reinforcing the maintenance of peace.

At this point in the discussion, it is appropriate to venture into the consequences of a legislative or jurisprudential change that had in view a different purpose than strengthening the function of law as a mechanism of social control aimed at maintaining peace between individuals who interact with each other.

If the change is jurisprudential, many times the law solves such a phenomenon endogenously: any jurisdictional pronouncement by a judge or court that departs from the content of the legal norms or that such departure is motivated by the transgression of its legal duty of impartiality with respect to of the parties to the conflict will render such pronouncement null and void and the judges will have incurred prevarication.

However, when a law is sanctioned by the legislature in contravention of its duty to dictate general and abstract norms and, instead, has the aim of favouring vested interests, little can be done beyond achieving a declaration of unconstitutionality, either by part of a constitutional court or by an ordinary court in the exercise of diffuse control of constitutionality.

This is for those cases in which the law in question also violates laws of a higher rank such as the Constitution.

Notwithstanding, when a norm is constitutional and, however, it was not enacted for the purpose of legislating in general and abstract terms, but instead sought with its sanction to favour certain vested interests to the detriment of others or public interests, little can be done for the legal system to correct itself according to an endogenous mechanism and the law, therefore, will have lost its neutral character.

It is this lack of neutrality of the legal system that delegitimizes it as a peaceful means of resolving disputes between individuals and, consequently, sharpens the intensity of conflicts, whether they consist of disputes between individuals or escalate into political questioning regarding the legitimacy of the legal-political system itself.

It was not for nothing that there were revolutions, such as the French one, which led to the enactment of civil codes, as a way of crystallising the reestablishment of a neutral normative order, generally described as fair. Note, likewise, that the Napoleonic Code did not contain any innovations, but rather consecrated –and synthesised- legislatively the jurisprudential evolution of the previous centuries.

Similarly, a territorial dispute between two countries could remain diplomatic for decades and, under a change of circumstances, escalate the conflict to a warlike stage.

This change in circumstances may be due to a redefinition of the interests of one or both countries, discoveries of wealth in the disputed territories, or technological innovations that modify the relationship of the respective countries with the geography of the disputed territory.

Note that in no way do these changes in the conditions surrounding the conflict affect a change in the titles of sovereignty over the disputed territory, but what changes is the intensity of the interest in it and the calculation of the chances of success in the event of a war escalation.

However, at the international level we find a plurality of normative sources -international custom, treaties, the norms of international organisations-, without courts of application in most cases and without a clear enforcement system to guarantee impartiality.

Despite arbitral awards can be found among small nations, which submit a territorial issue to the arbitration of a third power or institution that enjoys prestige between both countries, an issue that the parties involved do not consider of vital importance to them; but in most cases we are faced with conflicts or claims that will last over time, as long as the war alternative is disadvantageous for both parties.

Sustaining the principle that all agents who make decisions are rational, it is appropriate to ask under what conditions for such agents it is still reasonable to maintain a negotiation and under what others the most reasonable indicates escalation in the intensity of the conflict.

When the controversy occurs between two parties subject to the jurisdiction of a state and the object of the controversy has a certain relevance, the options of the parties follow one another between negotiating or going to trial.

On the other hand, among sovereign nations, although there is the alternative of submitting to an arbitration award, when the disputed issue interferes with a vital interest or makes the country’s own survival, the military confrontation constitutes the option to negotiation.

Paradoxically, when two individuals have a confrontation that is so insignificant as to be taken to court, the options also lie between negotiation or the deployment of violence -verbal or moderately physical, below the threshold of what the law would consider a crime. This occurs because both the international sphere and certain spheres of human interaction are naturally regulated.

From our point of view, this is one of the most relevant theoretical controversies: if such a natural system can be entirely deduced from reason -as maintained from Hugo Grotius onwards- and, therefore, can be stated and agreed upon by the consensus of the parties through a rational discussion, or if we can characterize natural law as an empirical normative system -as conceived by David Hume in the 18th century and later rescued by Friedrich A. Hayek- that grows spontaneously.

This last conception about the empirical character of the international rule-based order can be a convincing alternative to both realism and idealism. Even more so when the question of the neutrality of the liberal international order is questioned, both from realism and from critical currents. Since the empirical rule system emerges at the same time as the expectations of the agents, the neutrality of the resulting order will be highly probable.

Therefore, in accordance with this vision, the variation in the intensity of the conflicts will not have to be sought or justified in a modification of the rules of the game, but in a change in the relative weight of the interests in dispute, that is, in the open texture of the nature of conflicts.

May the Fourth…

On May 4, 1919, a student protest against the ceding of Chinese territory to Japan by the Versailles Treaty initiated a reassessment of China’s attitude to its own past in the face of Western modernity and domination. The May Fourth Movement, as this ongoing reassessment came to be called, rejected the early liberal emphasis on piecemeal reform and constitutionally limited, elite-led government, but its own brand of liberalism remained indebted to the categories and concerns of late Imperial and early Republican liberal debates.

This is from the amazing Leigh Jenco, and it’s titled “Chinese Liberalism.” Read the whole thing (pdf).